Watch for margin recovery in Q4 as the company works through its record Modular Buildings backlog and new laser/crane investment. The steel cost headwind (up >40% from year-end and rising oil prices may challenge margins for the rest of fiscal 2026 per management.
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Executive Summary
Arts-Way Manufacturing reported a weak Q3 fiscal 2026 with a net loss of $140,000 vs a $254,000 profit a year ago, as Q3 sales fell 12.7% to $5.6M. The company also took a $956,000 term loan to purchase a fiber laser and crane system. While nine-month sales grew 12.3%, operating income declined 36% and EPS dropped to $0.04 from $0.33, largely due to a non-repeating Employee Retention Credit. The combination of a quarterly loss, margin compression, and rising steel costs outweighs the positive backlog commentary in Modular Buildings.
Key Financial Metrics
Key Facts
- Q3 fiscal 2026 net loss of $140,000 vs net income of $254,000 in Q3 fiscal 2025
- Q3 sales decreased 12.7% to $5,615,000 from $6,432,000 year-over-year
- Nine-month EPS dropped to $0.04 from $0.33, a decline of 88%
- Nine-month operating income fell 36% to $547,000 from $858,000
- Gross margin declined 2.1 percentage points to 27.9% for the nine months
- Entered into a $956,000 term loan with Bank Midwest to purchase a fiber laser and crane system
- Modular Buildings segment backlog is the highest in history, expected to carry through fiscal 2027
- Steel prices increased over 40% from fiscal year end, pressuring margins
Financial Impact
Q3 net loss of $140,000 vs prior-year profit of $254,000; nine-month net income fell 86% to $230,000 from $1,680,000
Risk Factors
- Steel prices up over 40% from fiscal year end, rising oil prices may further challenge margins
- Agricultural sector outlook remains bleak with modest row crop prices and rising input costs
- Nine-month net income of $230,000 was boosted by a non-repeating $1,154,000 Employee Retention Credit in the prior year
- Q3 operating loss of $70,000 vs operating income of $345,000 a year ago
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001437749-26-032423 |
| Exhibit: ex_1024121.htm | 0001437749-26-032423 |
| Document: artw20261008_8k.htm | 0001437749-26-032423 |
| Document: 0001437749-26-032423-index-headers.html | 0001437749-26-032423 |
| Document: 0001437749-26-032423-index.html | 0001437749-26-032423 |
| Document: 0001437749-26-032423.txt | 0001437749-26-032423 |
| 8-K Data (Synthetic) | 0001437749-26-032423 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 9, 2026 18d ago | 8-K | $3.54 $3.17 | ▲ +10.59% | ▲ +8.63% | $2.94 (+16.95%) |
Oct 1, 2026 26d ago | SC 13G/A | $3.00 $3.67 | ▲ +22.33% | ▲ +21.03% | $2.94 (−2.00%) |
Apr 9, 2026 28w ago | 8-K | $2.24 $2.61 | ▲ +16.52% | ▲ +13.33% | $2.94 (+31.25%) |
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